The debate is centred around a regulated settlement model where communicating parties are charged for the traffic they exchange. The telcos like it because, as the report title makes plain, the reimposition of old rules wrapped up in a parcel of new regulations all tied up with a ribbon woven with the logos of traditional telcos would suit them down to the ground.
‘Sender pays’ is the is a voice-traffic settlement model that was used for getting on for a hundred years and some players would like it back, even though it was designed in the antediluvian pre-digital days of another epoch. It is based on the outdated notion that a ‘caller’ was charged for taking time on a circuit or ‘line’. If a ‘caller’ rang a number on a different network that operator charged for the period of the connection was in use on one network and the cost charged to them by the second (or third or fourth) network needed to complete the connection. This was the “termination fee” and was the reason why long-distance calls used to be so incredibly expensive.
In the Internet age that lucrative model is (or should be) redundant, not least because the Internet is not a circuit-based comms system and, currently, Internet interconnection is managed via a number of voluntary agreements. In the “transit” model, one network pays another to carry traffic to all parts of the Internet. With “paid peering”, one network pays another to exchange traffic between their customers. In “settlement-free peering”, one network has a payment-free agreement with another network to exchange traffic between their customers for zero monetary charge. Currently, settlement-free peering comprises 99 per cent of all Internet peering agreements.
The Internet Society is an US not-for-profit advocacy and lobbying organisation founded back in 1992. It is headquartered in Reston, Virginia, in close proximity to the power brokers and regulators of Washington DC, and has an office in Geneva, Switzerland not far from the United Nations and the International Telecommunications Union (ITU). Its mission is “to promote the open development, evolution, and use of the Internet for the benefit of all people throughout the world.” It is supported by bureaus around the world and by 89,000 individual members.
“Old Rules in New Regulations” – Why “Sender Pays” Is a Direct Threat to the Internet” was authored by David Frautschi, Senior Director, European Government and Regulatory Affairs and Carl Gahnberg, Director, Policy Development & Research.